With just 4,447,369 of us rattling around in 268,000 square kilometres of this green and pleasant land, there's plenty of space for everyone in New Zealand.

Space for our traditional quarter-acre empire, for the bach, for the lifestyle block, for all those sheep, for beer and cheese commercials to mythologise our great rural existence.

But the world's population is growing. And more people brings economic prosperity, the old argument goes.

The New Zealand Institute of Economic Research believes we'd be better off with 15 million of us.

The Green Party argues those of us who are here are already doing enough environmental damage.

Actually, say demographers, it's hard to control your population, but they expect ours to climb to at least 5.4 million by 2036. Good news, then?

Not exactly. Those people will be older, much older. The number of Kiwis over 65 will almost double in the next two decades. And the worldwide population boom is actually ending - and when it levels out, we will find ourselves in an increasingly tough race against other western countries to attract skilled migrants to fill the gaps. Persuading young Kiwis not to head to London or Sydney will only get harder - but more important.

Globally, people are fleeing to the big smoke. Last year was the first time in human history more people lived in cities than rurally.

In New Zealand, they are moving faster than most, and to just one city. Three out of four "new" New Zealanders - by birth or migration - are Aucklanders.

It's predicted the City of Sails' population share will rise from one-third to more than 40 per cent - making it vital that we find answers now to how to live together in our biggest city. And while everyone is cheek-by-jowl in Auckland, the provinces face the opposite problem: it's entirely possible smaller towns could become "grey towns", entirely populated by retirees, or even ghost towns, where so many have fled to Auckland the place simply closes down.

Traditionally, those who argued against over-population, like the 18th-century thinker Thomas Malthus, worried about famine and mortality; now, it's more likely to be about a longer commute, less chance of finding a parking spot, or, for some, fear your neighbours are more likely to be immigrants.

In Auckland, it may mean giving up your weekend game of soccer: in a decade's time, it's predicted there could be a 3000 hours a week shortfall of available sportsfields.

How to convince a nation wedded to the quarter-acre to live differently will be a challenge. Auckland must change its ways.

"Some of it is quite frightening and challenging to people," admits the city's deputy mayor, Penny Hulse.

"And I guess our job is to be brave: that's what leadership is about, and say let's look at a new way."

Imagine the tumbleweed blowing down the main street of provincial New Zealand.

"Ghost towns" are going to happen, says Natalie Jackson, professor of demography and director of Waikato University's Population Studies Centre.

"Absolutely, they are not too far away at all," says Jackson.

"We will already be seeing [the start of] them. Towns do grow and they decline but we do expect to see them survive our lifetimes."

The young are expected to move to Auckland. Jackson says this drift will be compounded by the loss of their "reproductive potential" and the growing number of old people completes the imbalance.

The trend also becomes self-perpetuating: if there aren't enough children left for a school, teachers lose their jobs and have to go too. Towns relying on a single primary industry such as forestry may be first to close - think places like Kawerau.

While Japan already plans to close 500 redundant regional towns within the next five years, here it's likely to be more subtle: the slow withdrawal of services like driver-licensing or the local policeman.

And the big issue, Jackson says, will be the age of those left behind, so if it's not a ghost town, it will be a grey town. While about half of New Zealand's provinces will have fewer people in 20 years' time than they do now, in several other provinces, the only expected growth is in old people.

"It is hard to say it is growth," she says.

As the baby boom generation reaches retirement, they may shift to the Coromandel, Northland and Nelson, but they are likely to move back to major centres as they become elderly and need services.

Immigration won't help: migrants are attracted to Auckland, and it's proven hard to persuade them to live elsewhere, while our emigrants tend to be from the regions.

The Green Party has a policy on "regional optimal populations" but its population spokesman Kennedy Graham admits he's not sure how you can encourage or compel people to stay in the provinces.

One uncertainty is over what will happen in Christchurch - whether the recovery will lead to a permanent population (and if so, how they will be accommodated) or merely a bunch of Fifos (Fly in, fly out) who will leave once the job is done.

Some countries like Ireland, faced with one city dwarfing the rest, respond by sending government departments to smaller cities - but New Zealand already has its civil service in Wellington, and Wellington's own tight geography and ongoing government austerity measures means it is unlikely to grow substantially.

"We are good people in Auckland, we are not there to cannibalise them," protests Hulse gamely.

"We are part of NZ Inc . . . part of the big picture. There's only 4.5 million of us, it's NZ against the rest of the world, not Auckland against New Plymouth or Dunedin . . . we're not doing it on purpose."

Aucklanders are petrified of living in skyscrapers. A remarkable survey of the world's youth by the World Health Organisation found our young people's biggest fear was not crime or poverty or climate change but living in an apartment.

Persuading them that "higher-density" living (that's more people in the same space) isn't a bad thing is a challenge, but one that must be faced.

The art photographer Patrick Reynolds, who blogs authoritatively on Auckland's infrastructure, puts it this way: "It's about the quality of the growth, rather than whether it's a good thing or whether we can stop it . . . the planet is urbanising at a vast rate, what's happening here [in Auckland] is child's play compared to, say, China."

After 10 years in London and Dublin, urban designer Greg McBride says he returned home "looking at the place with new eyes, and understanding how people can live in denser situations, and happily so".

McBride, principal urban designer at infrastructure specialists AECOM, would love to build beautiful, sophisticated modern terraced housing and low-rise apartments in Auckland, but is finding resistance.

"The biggest issue in urban design is public understanding of how we can live better in a more dense setting . . . it hasn't been properly communicated to the public yet."

And, he admits, it hasn't been properly done: while he can show me some great examples of modern, intelligent medium-density buildings in London, there are few Kiwi examples he can walk people through. This has to change, agrees Hulse: "We want to draw a line under bad development and say we're not having it any more, it won't happen."

Hulse, who describes herself as "an eternal optimist", is confident developers are poised to begin designing and building good medium-density housing, "and people will change their minds about urban living".

This seems particularly optimistic given the barbed exchange of letters she's currently engaged in via the local North Shore Times newspaper over possible intensification of the suburb of Birkenhead, but Hulse says not everyone still wants a four-bedroom suburban villa.

Reynolds says amid the "great panic" around the loss of the quarter-acre block, mainly predicated on nostalgic fantasy, people have simply misunderstood: "It's not ripping down Freeman's Bay and Mt Albert to put in towerblocks, that is ludicrous and alarming."

But it alarms Dushko Bogunovich, who lectures in urban design at Unitec. Bogunovich says the suggestion of the council's masterplan, the Auckland Plan, that 70 per cent of new homes are contained within the existing city boundary is ridiculous: "Maybe the other way around: 70 outside the city, only 30 would fit within."

Bogunovich says Auckland's appeal is its low-density, character suburbs and describes high-rise plans for the beachside suburb of Takapuna as "outrageous".

The alternative is to relax the urban limits. But sprawl is expensive - it requires more sewerage, powerlines, roading, public transport - and Hulse is unequivocal: "Successful cities do not sprawl. We're already one of the world's most sprawled cities, why would you do more? It simply doesn't make economic sense."

But Bogunovich says sprawl is already here, was unavoidable because of Auckland's strange

That geography, coupled with the city's "short history and short budget", calls for a bespoke solution, arranging better transport and more homes around a central spine from Warkworth to Huntly.

On the idea of amassing population around railway stations, he and Reynolds agree. But Reynolds wants a "more deliberate and compact" city. "Does anybody think it is a good idea if Hamilton becomes South Auckland?" asks Reynolds.

McBride believes there are several reasons why Auckland finds itself so ill-prepared for more people: that European settlers escaping squalid cities wanted space; that our growth came during the period when car was king; and that the leaky homes furore strengthened a suspicion of modern-style homes. That means making some significant decisions right now, around issues like transport, to ensure a good quality of life for its expanding populace. Massey University professor Paul Spoonley says the question is whether Auckland can "catch up" with these demands.

If Auckland gets bigger successfully, there will be benefits. The New Zealand Institute of Economic Research's John Ballingall says there's economic advantages to so many people in one place, while the American economist Edward Glaeser's work argues city-dwellers are healthier, greener, and have better prospects.

"An Auckland of three million could have a much more efficient economy and still be the world's most liveable city, I really believe that," says Bogunovich.

"I'll be a little bit provocative," concludes Hulse.

"We actually need to stop being frightened of growth. If New Zealand is going to go ahead, whether the rest of New Zealand like it or not, I am afraid Auckland does need to be a powerhouse. Growth can fuel that. Growth is neither good nor bad, it's what you do with it. That's why we need to get it right."

One impact of our ageing nation, an ageing planet, and the end of worldwide growth will be a desperate scramble for young talent.

"Young people will be more in demand," says Jackson.

She says we may struggle to keep ours here. Last year, worryingly, was our biggest-ever exodus to Australia: 54,000 Kiwis crossed the Tasman.

And although the Greens' Graham notes that, as a temperate island, we may become very attractive to climate change refugees, Spoonley - who specialises in studying immigration - says overall, the competition for migrants will only increase.

"One of the major strategies for nearly all OECD countries is going to have to be migration: you want to recruit skills, but it is also a form of population replacement," he says, especially for countries like Australia, Japan and Italy, which have already dropped below the birth rate necessary to sustain their existing populations.

And here's the bad news: Spoonley says the two big talent pools in our region, India and China, will face the same challenges and want to keep more young people at home, forcing us to try new markets.

That makes it even more vital we accommodate the population we have in the right way.

"When we do surveys of immigrants and why they come to New Zealand, they all mention quality of lifestyle . . . so is growth going to compromise our major brand advantage?" he asks.

There's also the thorny question of how we all get along. A significant growth in our Asian population could cause tensions, says Jackson, "as people, especially Pakeha, look around and realise they are not quite the dominant group they once were".

So how many Kiwis should there be? Debate on the issue is relatively scant. The New Zealand Institute of Economic Research used a paper compiled for Export NZ in January - "Scale Up or Die" - to declare New Zealand's optimal population should be 15 million.

"There's a massive gap in public policy debate around this, and what we're trying to do is prompt discussion," says Ballingall, who admits 15 million was an "arbitrary choice" designed to illustrate their argument that New Zealand can only be truly economically successful offshore if we upsize.

"We're not saying this would be easy, and not saying it would be cost-free, we're just saying population is an important economic debate that needs to be had," he says.

"A lot of people have put it in the too-hard basket. If as a country we decide that we prefer to stay small then so be it, at least we had a well-informed debate."

Rather proving Ballingall's assertion that politicians have steered clear of population debate because it touches upon such sensitivities as immigration, the Greens remain the only party with a population policy.

Theirs is based on New Zealand's "ecological carrying capacity", basically how many people per hectare the environment can sustain. Kennedy Graham says 5.7 million has been suggested as a possible population limit.

Graham says the world's ecological footprint is already 50 per cent over-capacity; New Zealand requires 4.9 hectares per person when we should need only 1.8, making us the 32nd worst country in the world. Therefore, says Graham, you could argue there are already enough of us.

Jackson's view is that when so many places have already stopped growing, we ought to "make more investment into the people we have".

What's clear is some debate is necessary about how many people we want on these two islands, even if it's just to work out how we fund the pensions of our burgeoning number of superannuitants.

"I understand these things are scary," says Jackson cheerfully.

"But it's also a good long-term warning: the tsunami bell's ringing but it won't hit for a long time."